"Probes focus on a State Street bond fund; Clients say high risks of securities hidden" by Beth Healy, Globe Staff | April 30, 2009
State and federal regulators are investigating State Street Corp. to see if it misled clients about a bond fund that was supposed to be low-risk, but which invested in mortgage securities that produced large losses, according to an official involved in the probe.
Related: Congress and Bush Colluded to Loot American Worker
The State Street Limited Duration Bond Fund, used by pension funds and other institutional investors as an "enhanced cash" product, was created to generate better returns than ultra-safe money market funds, but with only slightly more risk. But the fund instead waded into mortgage-related assets that got into trouble as the subprime market collapsed. In addition, the bond fund borrowed money to make bigger bets on the sector, which magnified its losses.
Boston-based State Street, which manages $1.4 trillion for large investors, is facing numerous lawsuits from clients alleging that it did not adequately disclose the bond fund's risk level. The fund is managed by State Street Global Advisors, the company's investment arm.
State Street declined to comment. The fund no longer exists....
One can only hop that the same fate awaits the looting State Street liars.
Sorry, sisters. I am not as forgiving as you are....
